Endowment Effects for Products with Negative vs. Positive Attributes

26 Pages Posted: 9 Oct 2010 Last revised: 11 Oct 2010

See all articles by Gerrit Antonides

Gerrit Antonides

Wageningen University

Ravi Dhar

Yale School of Management - International Center for Finance

Dennis Goedhart

DG Graphic Design

Lilia Ziamou

Baruch College

Date Written: October 1, 2010

Abstract

In two experiments we study the endowment effect in the exchange of an endowment for an alternative product. The products differed either in their unique-positive or unique-negative features. Furthermore, we compared endowment effects for both hedonic and utilitarian goods. The results of the first experiment show a larger endowment effect in the unique-negative than in the unique-positive features condition, especially for utilitarian products. The results suggest that people tend to focus on the exchange product under these conditions. The second experiment shows that induced focusing on the exchange product positively influences the endowment effect, especially in the unique-negative condition for utilitarian products. We conclude that focusing has differential effects on choices regarding positive vs negative features and regarding the type of good.

Suggested Citation

Antonides, Gerrit and Dhar, Ravi and Goedhart, Dennis and Ziamou, Lilia, Endowment Effects for Products with Negative vs. Positive Attributes (October 1, 2010). Available at SSRN: https://ssrn.com/abstract=1689291 or http://dx.doi.org/10.2139/ssrn.1689291

Gerrit Antonides (Contact Author)

Wageningen University ( email )

Wageningen
Netherlands
+31.317.483897 (Phone)

HOME PAGE: http://https://www.wur.nl/en/Persons/Gerrit-prof.dr.-G-Gerrit-Antonides.htm

Ravi Dhar

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520-8200
United States

Dennis Goedhart

DG Graphic Design

Alblasserdam
Netherlands

Lilia Ziamou

Baruch College ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

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